A payment made by Medicare in excess of the amount properly payable by law is an overpayment. If Medicare identifies an overpayment, it becomes a debt that you owe to the federal government. Under applicable federal law, CMS (Centers for Medicare Services) will attempt to recover the overpayment.
Once Medicare determines that you've made an overpayment, the Medicare Administrative Contractor (MAC) initiates the correction process by making an initial demand for repayment. Novitas Solutions, Inc. is the CMS contractor covering the State of Texas.
How Do Overpayments Happen?
Overpayments may arise out of:
- Duplicate submission of the same service or claim;
- Furnishing and billing for excessive or non-covered services;
- Payment for excluded or medically unnecessary services; or
- Payment to the incorrect payee.
These types of overpayments can occur in a number of fashions.
For example, there are times when Medicare will cover ambulance transports. In such instances, the transport must be from and to a Medicare approved point of service. If not, Medicare will seek recoupment. If an ambulance transports a person from their residence and delivers them to a Medicare approved facility, the transport may not be covered by Medicare if the individual lives outside of the Medicare approved facilities service area and there was a closer approved Medicare facility.
Billing for Services Not Delivered
The most obvious overpayment is billing for services that were not actually delivered. Recently, a pharmacy and its owner agreed to settle allegations brought by the OIG of the U.S. Department of Health & Human Services for $1,342,295.50, in a case in which the OIG claimed the pharmacy and its owner submitted claims to Medicare Part D for brand name prescription drugs that it could not have dispensed based upon inventory records. (This was part of "Operation Pharm Fury," a joint effort between the Office of the Inspector General, Office of Investigations, Office of Evaluation and Inspections, and Office of Counsel to the Inspector General.)
Improperly Submitted Claims
Recently, a physician practice providing otolaryngology services entered into a settlement with the Office of the Inspector General whereby the practice paid $200,630.00 in settlement to resolve allegations that the practice improperly submitted claims to Medicare and Texas Medicaid for hearing assessment services that were performed by unqualified technicians.
As one can see, the fines can be significant for these violations. In the event that a demand for recovery of an overpayment is made, there are several options. Among these options is the ability for you to submit a rebuttal statement to your MAC within fifteen (15) calendar days from the date of the demand letter. This rebuttal gives you the opportunity to explain and show proof as to why the alleged overpayment is not accurate. An attorney experienced in responding to overpayment demands and experienced in dealing with the Office of the Inspector General is critical to protecting your rights. There are five levels to a Medicare Part A and Part B appeals process. They are as follows:
- Redetermination by a MAC;
- Reconsideration by a Qualified Independent Contractor (QIC);
- Hearing by an Administrative Law Judge (ALJ) in the Office of Medicare Hearings and Appeals;
- Review by the Medicare Appeals Counsel; and
- Judicial Review in Federal District Court.
It is also important to remember that there are limitations on the recoupment. One such limitation is the requirement that when a valid first or second level appeal is received on an overpayment, CMS and MACs cannot recoup the overpayment until the decision on the redetermination and/or reconsideration is made. There are certain applicable timetables which apply in such situations; therefore, the guidance of experienced legal counsel is important to protect your interest. Also, it must be remembered that in the event a Medicare overpayment collection has been initiated, there will oftentimes be an investigation concurrently ongoing by the Office of the Inspector General for False Claim Act violations and/or fraud and abuse violations. Therefore, utilizing counsel that is familiar with each of these applicable regulations and who has had experience in dealing with the Office of the Inspector General and experience in dealing with Novitas is critical for the protection of your rights.
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Hendershot, Cannon & Hisey, P.C., regularly defends clients in connection with Medicare recoupment claims through the appeal process and representation of clients in dealing with the Office of the Inspector General on False Claim Act violations and fraud and abuse violations. To learn more, please visit our page on health care fraud.